Analysis: MISO coal capacity waivers pile up

OREANDA-NEWS. The Midcontinent Independent System Operator (MISO) is concerned about its ability to maintain grid reliability next spring as the amount of coal capacity trying to shut down before the end of the 2015-16 planning year has ballooned to 2,640MW.

The grid operator has repeatedly urged regulators to prevent coal plant operators from shuttering without securing replacement capacity. Many plant owners have asked for waivers from obligations to offer capacity into MISO markets so they can comply with air pollution rules that go into effect six weeks before the end of the planning year on 31 May 2016.

The Federal Energy Regulatory Commission so far has granted only one waiver request, for Indianapolis Power & Light's 216MW Eagle Valley coal plant. But the federal agency must eventually decide how to deal with more than 2,400MW of capacity similarly seeking permission to close early.

The latest waiver request comes from Wisconsin Power and Light for its 200MW Nelson Dewey coal units, which under a legal settlement with the Environmental Protection Agency must retire by 31 December 2015, five months before the end of the planning year.

The utility has already bought 155MW of replacement capacity, but last month asked federal regulators for a waiver that would end its capacity obligations and let it resell that replacement capacity.

MISO last week opposed the request, particularly because it would cover its entire winter peak demand period. The grid operator also challenged the idea that the waivers met a requirement to not have a major effect on the grid.

MISO in a related move last month asked federal regulators to approve tariff changes that would allow resources that plan to retire to be excused from their existing obligation to offer into the grid's forward capacity auction.